BNR Governor Isarescu criticizes the ‘tax on greed’: The mischief took us by surprise

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The National Bank of Romania (BNR) Governor Mugur Isarescu has criticized the Teodorovici Ordinance, mainly the decision to set a ‘tax on greed’ for banks.

Isarescu has criticized the Finance Ministry for not discussing with the banks before making such a decision and has said there are a lot of queries about the enforcement of the tax. BNR itself has difficulties in understanding the ordinance.

“Discussions should have been carried out with the banks. It’s not right to come before Christmas, at the end of the year, with such a bomb. This is the main dissatisfaction of the banking industry, I believe the Finance Ministry will have talks with its representatives. They have queries about the tax. We also have difficulties in understanding the ordinance. We would probably request an extraordinary sitting of the committee. The flexibility of the monetary policy would be affected and this will not help the Government,” Mugur Isarescu said on Tuesday.

The BNR Governor added that the central bank has conducted an impact study which showed losses of billions of euros generated by the tax.

“We’ve struggled to understand the ordinance. A team has conducted an impact study, in theory such a study should have been conducted before, we were asked to do it afterwards. Mr. Daniel Daianu tried to conduct an assessment on the monetary policy. It would be better to discuss it within a legal framework, in the National Committee for Macroeconomic Stability, as it is about an impact of billions of euros, it’s a serious matter. We have the right to suggestions, proposals, we cannot amend the government ordinance, but we have to tell the lawmaker about the impact and the Finance Ministry to answer us,” Isarescu said.

The BNR representatives were taken by surprise by this ‘mischief’.

“Let us assess it. We were taken by surprise by the mischief. It is an ordinance one does not know where to start from,” the Governor said.

Mugur Isarescu said the decrease of ROBOR Index lately has nothing to do to the tax on the banks’ assets included in the so-called Teodorovici ordinance.

The Government adopted before Christmas the emergency ordinance on tax amendments.

“A first decision is the proposal to set up a fund for the development of 31 spa resorts of national interest where we will provide the sum of RON 310 million. The goal is to modernize everything related to the infrastructure and also to endow them with modern equipment and train the medical personnel. One point is also to introduce a mechanism, to protect the population, for those who have assets in the case of a ROBOR Index higher than 2% (the so-called ‘tax on greed’ – our note). You all know, and we have here documents showing some unfair practices towards the population and the real economy,” Finance Minister Eugen Teodorovici said at the end of the Government sitting.

No invitation received from the Finance Ministry

Isarescu said on Tuesday he hasn’t received any invitation from Finance Minister Eugen Teodorovici to discuss issues at the ministry.

“I received no document,” Isarescu said at the briefing in the monetary policy

Asked if he would answer a possible invitation, the BNR Governor said: “We will meet at the National Committee for Macro-prudential Overseeing. Should we meet for a chat? For a coffee?”

Finance Minister Eugen Teodorovici said Sunday evening he would invite National Bank Governor Mugur Isarescu for talks, along with the chairman of the Romanian Banking Association, to discuss the way to enforce the tax on banks’ assets. Teodorovici accuses BNR of ‘aggressive pressure’ on banks not to decrease the ROBOR indices.

“I will invite Mr. Governor to the Finance Ministry. We went to his offices before. I invite him together with the chairman of the Romanian Banking Association, to hear from them some answers. I believe it is high time for the Governor to come and have an open discussion,” the Finance Minister said Sunday evening for Antena 3 TV private broadcaster.


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